2018 Mid-Year Executive Outlook

With the first half of the year already behind us, it’s time to check in with A/E leaders across the country for our annual Mid-Year Executive Outlook. A robust national economy and strong industry fundamentals have made executives as confident as we can remember, but challenges loom as we enter a mature cycle phase. These individuals touched on a wide range of subjects such as how they are coping with talent shortages, sectors with the best growth prospects, guidelines on making sensible acquisitions, and plans for the summer.

John Brusa, Jr., P.E.President & CEO
Barton & Loguidice
Syracuse, NY

How has B&L’s performance fared so far in 2018?

Performance for 2018 has been strong to date. With this trend, we are optimistic we will meet or exceed our 2018 goals for revenue and staffing. We are definitely seeing workload pick up in all markets as our backlog is up more than 21% year-to-date. Many opportunities are available, but competition remains high. We continue to service our core clientele while making smart go/no-go decisions to make the best use of our resources in expanding markets.

Given tight labor markets for A/E professionals, have you had to change your approach to hiring and retaining talent?

Like most firms, we definitely have become more aggressive in both the recruiting and retention of talent. For recruiting, we continue to advance our efforts on many different fronts including, increased internal recruiting incentives, retaining a search firm, launching a new website, and pursuit of a dedicated talent acquisition position. Retention efforts have come from promoting our family culture and core values, accommodating flexible work schedules when possible, enhanced training programs, and ensuring our benefit packages are competitive.

You became B&L’s President and CEO in 2017. Have there been new policies or initiatives you’ve chosen to pursue?

In my short time as President and CEO, the focus has been on reinvesting in our most valuable asset, our employees. In 2017, we made significant improvements to our benefits package to make it more competitive in today’s market. These improvements include providing a more robust retirement savings to our employees, converting to a PTO policy, and adding a holiday. We also invested in our fleet vehicles, which has helped with efficiencies, and overall program savings. As we grow, we continue to look at options for the overall company structure to improve on our already high client satisfaction and allow for efficient integration of acquisitions.

You recently launched a brand new website look and layout. What were your goals in how you present the company online?

Since it was more than 10 years since our last website update, it was definitely time for a website overhaul. The main goal was to provide a clean looking responsive website design that incorporates new technology and videos to highlight B&L’s family culture, core values and technical expertise. The new site allows a simpler user experience and helps recruit top talent to the company.

B&L has made select niche acquisitions of design firms as means of growth. What do you typically look for in target firms?

Once you analyze the initial key indicators of size, financials and market areas, it really comes down to focusing on personnel, synergies, and culture. At the end of the day, both firms need to come out stronger with the merger, leading to synergistic long term growth and stability. If the overall culture and core values do not align, then the chances for long term success are diminished. Supporting talent and resources are also considered, including how they can adapt into the team over the long term.

What are your plans this summer for rest and relaxation?

For me, rest and relaxation comes from spending time with my family. My family loves to hike and we typically plan various mountain excursions throughout the summer. Venturing into the backwoods and enjoying God’s creation has always has been relaxing for me, and it’s a great way for my family to unplug from today’s world and spend quality time with each other without all the technology and distractions. It’s good exercise too!

Al Barkouli, Ph.D., P.E.Chairman and CEO
David Evans and Associates
Portland, OR

How has DEA’s performance fared so far in 2018?

Our fiscal year starts in November, so we recently finished the first half of 2018. We are seeing very robust, organic growth and our overall performance is better than last year.

Given tight labor markets for A/E professionals, have you had to change your approach to hiring and retaining talent?

Our first priority is to retain our talent. We give close attention to retention factors such as employee appreciation/recognition and sharing news of the firm’s performance and projections. As we grow, there are new opportunities for our people to develop their careers and make a difference. On the hiring side, we recently implemented an employee referral program to encourage employees to recruit for us. Hiring has been challenging, but our in-house recruiting team has done a fantastic job of finding talent.

DEA works in various markets from transportation to energy to land development across offices nationally. Where have you seen the most promising opportunities for growth?

Geographically, all of the markets in the western U.S. are hot. For DEA, the greatest opportunities are in the transportation market.

DEA has acquired several engineering firms over the last 5 years as a means of strategic growth. What do you typically look for in target firms?

The number one factor for us is cultural fit. We believe that cultural fit is essential to subsequent integration and a merger’s success. We begin by assessing whether the outlook of a firm’s top leadership aligns with our values and core ideology. After that, we look for a strategic fit and how a firm fits into our overall strategy.

You have been with DEA since 1988. What advice would you give young engineering professionals starting their careers today?

Think about how you can make a positive difference from day one. When you do something that you are passionate about, it will help you enjoy life.

Chad Surprenant, P.E.President & CEO
ISG
Mankato, MN

How has ISG’s performance fared so far in 2018?

To date, 2018 is shaping up to be a fantastic year for ISG. We are up approximately 27% in revenue from 2017 year on year to date. In general, the markets we serve are trending positively. Being busy, I think we lost a little focus and tried to stretch a little on some proposal work early in the year. We could have fared better in that timeframe, but a market leader retreat helped right that before any pain was felt, and we are back on a nice winning streak.

Given tight labor markets for A/E professionals, have you had to change your approach to hiring and retaining talent?

We are constantly changing and evolving our hiring. We have developed a very attractive firm, strong culture, and invested heavily in marketing and talent to tell our story better through multiple means; personal, social media, and videography to name a few. It is working. Our Talent Engagement team has a marketing background, and from that we focus heavily on staff referrals and building personal relationships. Our Human Resources group is somewhat separate from Talent Engagement. The Human Resources team maintains competitive benefits and other employee welfare focus.

As a multidiscipline firm working across many services and markets, where have you seen the most promising opportunities for growth?

ISG is located in the upper Midwest, but we perform work nationwide. As a true multidiscipline firm serving many markets, we believe it is very important to understand our geography’s core economy. From there, we provide service to those markets which keep that economic engine humming, such as food & beverage, industry, K-12 education, and agricultural drainage and then the markets that are needed (public works, civic/culture, residential, etc.) to support those primary economies. Fortunately, our core economy is generally food and agriculture based, and those are always necessary.

ISG is 100% employee-owned through an ESOP. How has that been a competitive advantage?

The ESOP culture is one that we had prior to becoming one, so the transition has been very easy. Being an ESOP, and wanting to communicate its virtue has been focal in our communications with current staff, prospective employees, and acquisition targets. In all three of those camps, it has been advantageous; current staff have great pride in what they have grown and want to stay to see where it goes, prospective employees see it as a very real retirement plan option, and acquisition targets recognize that they are going from one ownership position to another. We have been told that becoming an ESOP will amplify the current culture you have, and we believe that to be true.

You have made select acquisitions of architecture and engineering firms as means of growth? What do you typically look for in target firms?

Since our first acquisition in 2012, only 25% of our growth in staff has been through acquisition. The primary factors we look at when considering an acquisition are; geography, specialty service, strength of clients, and strength of staff. We function as a single profit center firm with a decent sized geographical footprint. For example, if we are considering a firm who has a specialty service and a geographic-centric business model, we know that we can take their specialty expertise out to the market over a considerably larger footprint which allows us to increase their business line while being more selective in choosing the client and thus more profitable than the acquisition target was before. Just recently, we executed our first acquisition with the primary intent of human resources. The acquisition target was a subconsultant service provider, and with ISG being a multidiscipline firm, we knew we would likely not retain their client base, but we wanted the people. Most of our growth is organic, and expansion geographically and/or acquisition is often to provide aspirational opportunities for our emerging leaders.

What are your plans this summer for rest and relaxation?

I coach my youngest son’s 13 year old travel baseball team. We are in the midst of weekend tournaments now, but our state tournaments will be over in late July. Hopefully, we can work in a few long weekends here and there. Another local business person and I bought a Northwoods League Baseball Team, the Mankato MoonDogs. We have been watching several of those games at our recently renovated, ISG designed, ballpark, but would love to catch more games on the road.

Jared Loos, P.E., AIACEO
EwingCole
Philadelphia, PA

How has EwingCole’s performance fared so far in 2018?

We have experienced a great first half of 2018 and are extremely busy and have been growing in almost every office location and market. We are experiencing our second year in a row of double-digit growth. We continue to see excellent project opportunities and expect to remain busy well into 2019.

Given tight labor markets for A/E professionals, have you had to change your approach to hiring and retaining talent?

We have implemented several new methods for identifying new candidates and some have proven to be very effective. Our retention strategies continue to evolve; however, we historically maintain very good retention metrics. We have always placed a high value on professional development and employee benefits. We have expanded our human resources team and continue to evolve this to meet the expectations of the newer (younger) workforce.

As a multi-studio design organization working across offices nationally, where have you seen the most promising opportunities for growth?

For EwingCole, we see the most growth opportunities in the southern and western US. Nationally, our most significant growth is in the Science and Technology market, although we have also seen regional growth in our other core sectors such as Healthcare and Academics. We are continually assessing these opportunities; however, it comes down to servicing our national clients in the locations and the industries they require.

What are the biggest concerns your clients face today?

This varies widely by market sector and by client. One consistent theme is prioritizing needs, so they make the right long-term decisions for their facilities while limiting upfront expenditures. This decision-making process can be somewhat paralyzing for some organizations.

How can the architecture profession better convey its value in terms of differentiation, acumen and fees?

First, I think as an industry, we need to exercise a bit more self-control and discipline. We are all too quick to adjust fees, or pursue opportunities with selection processes that may not be in our overall best interest. We have seen that turning down certain opportunities has focused the attention of some of our clients in a positive way. It also creates an opening for a candid dialogue of where we can provide the most value. It’s simpler than anyone wants to make it. Find clients who value quality of service – and then provide it – consistently.

What are your plans this summer for rest and relaxation?

We just returned from a two-week family trip to Italy, so our big adventure for 2018 is behind us, although we had a wonderful time and the kids got quite an education. For the rest of the summer we will make as many long weekend trips down the Chesapeake Bay as we can. We like to visit St. Michael’s, Rock Hall, and Annapolis by boat and unplug from emails, iPads, Xboxes, and any other intelligence draining electronic device.

Chris Solomon, PLSPresident & CEO
SAM, LLC
Austin, TX

How has SAM’s performance fared so far in 2018?

I am pleased to note that our performance to date is very positive. We have surpassed our revenue plan for the first half of the year by 10% and compared to the same period in 2017, we experienced year-over-year growth by 30%. Our strong performance is driven by the development and expansion of our core end markets. We currently have the best balance of market diversification in the company’s history. We remain optimistic we will meet or exceed our 2018 revenue goals and continue to see strengthening of the business through the successful execution of our strategic initiatives.

Given tight labor markets for surveying and engineering professionals, have you had to change your approach to hiring and retaining talent?

The unemployment rate has been low for quite some time, so we have had to get creative and explore new ways to attract and build our talent pipeline. Our social media campaign allows us to share our company’s culture, core values and branding to prospective candidates. Through this initiative, our employees are more engaged, and we continue to build brand ambassadors internally, while gaining brand recognition, externally. We have also implemented new programs such as SAM’s Veteran Hiring Program, to share our career opportunities with Veterans who are transitioning to civilian roles. We expanded our University Relations & Internship program, along with our high school STEM initiative; giving the next generation of engineering and surveying professionals the opportunity to explore jobs and roles within our firm and industry.

Our people are what make us successful, so it is important to retain them by continuing to provide best-in-class benefit programs and more importantly, opportunities to grow in their careers. This year, we invested in our learning and development program by hiring an L&D Manager whose primary focus is to build internal training programs so that employees develop the necessary skills and competencies needed to be successful in the career paths they wish to pursue.

As a multidiscipline organization working across various client sectors and offices nationally, where have you seen the most promising opportunities for growth?

In late 2016, we acquired So-Deep, Inc. to advance our east coast expansion as part of our three-year strategic plan. This move provided an extended service offering (SUE), geographic footprint and client base; through which we have been able to leverage our complete suite of services in this region. Last month we acquired Nobles Consulting Group, Inc. (NCG). The acquisition of talent and service capability across both of these organizations is unparalleled, and is allowing us the opportunity to meet our clients’ needs like never before.

New technologies have radically changed surveying tools and techniques over the last 5 years. How does SAM stay on the forefront of these developments?

Providing best-in-class deliverables as efficiently as possible to our clients is one of the keys to our success, and staying on the forefront of technology advancements is central in achieving this. We also believe that putting the most advanced tools in the hands of our employees enables them to find more efficient ways of performing their tasks, and the approach also fosters a higher level of employee engagement. We continually work to build deep relationships with technology providers in our industry in order to try and understand what the next generation of technology might look like and when it will be available. We also attend industry and technology related conferences and perform large amounts of research to understand what new advancements are being developed and how we can best implement them. Additionally, we have a group of great employees in our Applied Technology Department who work and partner with the rest of the company to find, develop, and deploy the latest in hardware and software solutions along with improved workflows in order to maintain our position as a technology leader in our industry.

You mentioned your acquisition of NGC, a surveying and mapping firm in Florida – how does their team help advance SAM’s strategic expansion goals?

We are very excited about the career and business opportunities this relationship brings for both the NCG and SAM Teams. NCG’s reputation in the Southeast is second to none, and Allen Nobles’ investment in industry education, staff, and technology has set the bar high. NCG’s team is well- respected and considered by the land surveying profession to be one of the best in the State of Florida. Their great reputation will be leveraged to deliver our full suite of services to their existing client base, and expand our geographical presence through the many untapped and under-marketed clients/opportunities that exist in the Southeast. Both firms share similar core values and cultures, and we look forward to what the future holds for the team.

What are your plans this summer for rest and relaxation?

We live in Austin, Texas, and due to its exponential growth, the city is a fast- paced environment which can be exhausting at times. My family and I love escaping to the Hill Country in Texas; things move at a much slower pace which is very refreshing. My rest and relaxation comes in the form of working on our ranch in the Hill Country. There is always grass to mow, weeds to spray and wildlife feeders to maintain. I grew up in the Midwestern U.S. working on my uncle’s grain and livestock farming operations and was able to see, first-hand, the fruits of my labor.

One of the main drivers for me entering the Land Surveying profession was that I enjoy being outside and spending time on our ranch allows me to share the love for the outdoors with my wife and three daughters. Our girls’ favorite part of the ranch is taking photographs of the wildlife and feeding the cattle. In today’s demanding business environment work-life balance is very important, and our time at the ranch helps me stay centered and focused. Early mornings on the porch allow me to enjoy a cup of coffee and reflect on the current business challenges, ways to continue strategically advancing the business, and introspecting for opportunities for personal development.

Coming!

November 7-9, 2018
Ritz-Carlton Golf Resort
Naples, FloridaClick here for more details and to register.

Comments are closed.

About the Author

Steve Gido specializes in corporate financial advisory services with a focus on mergers and acquisitions. Steve has assisted architecture, engineering, environmental consulting and construction firms of all sizes across North America achieve their growth or liquidity goals through successful mergers & acquisitions. Steve has over 15 years of investment banking experience and holds the chartered financial analyst (CFA) designation from the CFA Institute.